MPs approve Irish loan: bad news for Ireland and Britain, good news for bankers and Eurocrats

The House of Commons approved the Loans to Ireland Bill yesterday, rushing through all three readings in a single afternoon. Most MPs supported the measure from decent and generous motives. Ireland, they said, was a special case: an old friend and a near neighbour.

True. But Ireland never wanted this loan package. On the contrary, it was forced into the bail-out, first by a concerted campaign by eurozone leaders to talk it down in the markets and then, when that didn't work, by the ECB's threat to refuse liquidity to Irish banks.

You don't help an indebted friend by pressing more high-interest loans on him. (Nor, human nature being what it is, will he remain your friend, as Polonius wisely tells Laertes.) Yesterday's measure was not about rescuing Ireland, but about rescuing the euro: a truth that is frankly admitted in Denmark and Sweden, the other two countries that have chipped in with "bilateral" loans which just happen to match what their obligations would have been had they joined the single currency. Put bluntly, British and Irish taxpayers are being penalised in order to prop up bankers and Eurocrats.

Some MPs made these arguments during the debate. Douglas Carswell moved an amendment (backed by 27 Conservatives) to allow the House of Commons to set the interest rate. Steve Baker makes a fine Austrian critique of the whole scheme here. The speech of the day came from Mark Reckless, the MP for Rochester, as you can see in the clip. I don't think it's an exaggeration to say that, had the chamber been full, and had more MPs heard his argument, the measure would have failed, and Ireland would have woken to a far brigher prospect this morning.